There’s not long to go now until “the biggest change to housing law in Wales for decades“, according to Welsh Government Minister Julie James. If the fact that there’s going to be a big shake-up in the industry is news to you then we’re here to tell you everything you need to know about the Renting Homes (Wales) Act 2016. Simply read on!
IMPORTANT UPDATE: the Act has now been deferred until the 1st of December 2022. You can read the official announcement here.
What is it?
The Renting Homes (Wales) Act 2016 is a long-awaited change to legislation in Wales, affecting how landlords can operate and meaning very few rental laws will continue to be shared with England going forward.
When does it happen?
The Act will come fully into force from the 15th of July 2022. There will be no excuses for not adhering to the letter of the law laid out in the act so if you’re a landlord then now is the time to brush up on your knowledge of what it entails.
What do I need to know?
There are several different parts to the Act, with none of them more important than the others, though some will require more changes to your usual practices than others.
We’ve endeavoured to give a concise explanation of each change, so that you don’t have to read article after article to find out what you need to know. Further reading – should you need any – will be linked in each section.
Notice period changes
The minimum notice period to be given from landlords to tenants will become six months. You also won’t be able to serve notice for the first six months of a tenancy, and won’t be able to service notice during the fixed-term of the tenancy.
What this means is that tenants are guaranteed a minimum 12 month occupancy when they sign a six month contract, which you’ll need to bear in mind should you, as a landlord, have alternative plans for the property. Also, legitimate repair requests that are met with a ‘retaliatory eviction’ will now mean that the landlord will not be entitled to possession if the Court deems that the notice was issued to avoid satisfying the repair. Landlords will then be unable to serve another ‘no fault’ notice for at least six months.
This does all differ, however, if the tenant has breached the tenancy terms, in which case the notice period will be one month, or less if the tenant has behaved in an anti-social manner or seriously failed to pay their rent. A court order will still have to be obtained if your troublesome tenant refuses to move out though.
Finally, landlords will be unable to serve eviction notices if they fail to meet certain obligations, such as obtaining a Rent Smart Wales licence. This will make regaining possession of their properties difficult and complicated.
Break clauses for longer tenancies only
Break clauses will now only be permitted where a tenancy is for a fixed-term of two or more years and this can only occur at the 18 month mark, with the soon to be customary six months notice.
Terminology changes for contracts
There will be various terminology changes including:
- Tenants to become ‘contract-holders’
- Tenancy agreements to become ‘occupation contracts’
- Private rented sector tenancies to become ‘standard occupation contracts’
- Section 21 and Section 8 notices will no longer exist and will be covered instead by other sections.
New terminology that will have to be in occupation contracts
- Key matters: names, property address, etc. The essential items as it were.
- Fundamental terms: this covers such things as landlords obligations regarding repairs, possession procedures and so on. Some of this is fixed as per the terms of the Act and other aspects can be amended provided both parties agree in writing.
- Supplementary terms: this will cover such things as contract-holders notifying landlords properties will be empty for a set period. All things included within this bracket can be amended as long as a written agreement is achieved.
- Additional terms: this covers specific items to a contract that will not be the case for every contract and must be fair.
Landlords will also have to provide a ‘written statement’ of the occupation contract to the contract-holder, which you can find out more about here.
Joint contract amendments
It can be a headache when a tenant in a shared tenancy wants to move out of a property during their contract ,meaning a whole new contract has to be created. With the new changes contract-holders can be added or removed without need of this. This will be majorly beneficial for people wishing to escape abusive home situations as landlords will be able to evict solely the abuser, rather than all contract-holders.
What will happen to existing tenancy agreements
Your existing tenancy agreements will automatically convert to an occupation contract, with landlords given a maximum of six months to issue a written statement of the converted occupation contract to their newly termed ‘contract-holders’.
Homes must be fit for human habitation
Now, we would like to think that all landlords are scrupulous when it comes to their properties but the new Act ensures that this will have to be the case. In fact, there will be 29 matters and circumstances that must be adhered to and failure to do so means contract-holders will not have to pay rent. Any disputes over this will be settled by the court. Find the government’s guidance for landlords here.
It will now be a requirement that a carbon-monoxide alarm is installed in each room housing a gas appliance, an oil-fired combustion appliance or a solid fuel burning combustion appliance.
They will have to be installed properly, lower than smoke alarms, and landlords will be responsible for ensuring they are in working order. Please note that the fragility of carbon-monoxide alarms means this will have to be done more regularly than smoke alarms. Failure to comply with this regulation means rent will not be payable during the time in which the property is considered not FFHH (Fit For Human Habitation) and there will be no grace period for this part of the regulations – so make sure you meet the requirements by the 15th of July!
Mains-wired, interlinked smoke alarms
Another regulation that will ensure tenant safety is the requirement for mains-wired and interlinked smoke alarms to be installed on every storey of a property. It doesn’t matter what type of property you have, you will still have to comply.
These alarms will have to be positioned where the occupier can hear them, so if necessary you may need more than one alarm per storey, to ensure all contract-holders will be able to hear the alarm. You’ll have to ensure the smoke alarm meets the requirements and that it is correctly fitted.
The smoke alarms in your property should be tested by a professional who produces a fire detection and alarm system inspection and servicing report. The report will cover when the next inspection should take place and rent will not be payable in properties where smoke alarms aren’t installed or functioning properly. There is a grace period for this however, though it’s a little complex. If, by the 15th of July 2022, there is already an occupation contract in place then landlords have a year to comply. If a new contract starts within that year, however, the requirement will begin from the new occupation contract start date or from the date when a fixed-term contract goes to periodic within that year.
The time frames illustrated above will also apply for another facet of the Act, which is the requirement that an electrical safety certificate be produced for every property. This will be termed as ‘periodic inspection and testing’ (PIT) and will have to be carried out every five years, unless a the report indicates a shorter timeframe.
This will have to be carried out by a registered electrician and will indicate overloading, defective electrical work, lack of earthing or bonding, or identify any shock risks and/or fire hazards. Once the professional has done this they will issue a domestic electrical installation condition report (EICR), which will detail any issues and recommendations for resolutions to the issues. Landlords should also regularly visually inspect fixtures and appliances, particularly between contracts.
The certificate relating to the findings of the report must be given to contract-holders within seven days of their contract starting and they must also be given written confirmation of any work to be carried out based on the recommendations of the report. Any new reports must also be issued to contract-holders within seven days. As with the other regulations previously mentioned, contract-holders will not have to pay rent for properties that do not meet these requirements.
A lot to do to be ready for the Act
We recommend that all landlords read up thoroughly on the Act and follow the regulations to the letter. Though certain requirements may not apply to you straight away we believe it’s best to act now and ensure your property meets all requirements, rather than causing yourself any stress in the future or trying to wrap your head around when you will have to do x, y and z!
One more final thing to be aware of is that the rules for Energy Performance Certificates (EPC’s) will also be changing shortly, with all properties in Wales needing to have a rating of C as a minimum.
Varcity Living to the rescue
We’ve already been taking care of legal compliance for our existing managed landlords but we can appreciate that many landlords would find this more than a little overwhelming! If that’s the case then the team at Varcity Living can help. A team of professionals with years of experience, we’re experts on the new Act and can take care of all aspects of these changes for you. We can:
- Manage your property’s adaptations to meet the new regulations before the deadlines.
- Provide insightful advice on how you can update your property to achieve the best rental income possible.
- Save you the cost and time achieving a Rent Smart Wales landlord license.
- Provide qualified contractors who are up to date with the changes and able to carry out all necessary testing.
- Capture attractive imagery and 360 degree video tours of your property, which will help to speed up the lettings timeline.
- Manage all your deposits and register them securely with the DPS.
- Chase up missing rental payments with our dedicated accounts team.
- Manage all paperwork related to signing up and releasing contract-holders.
- Provide you with account access to the Landlord Dashboard, which gives you an overview of all your properties with us.
If this sounds like an attractive solution then get in touch with us today to become a Varcity Living landlord or to convert your Let Only status to a Fully-Managed one. You can do so by emailing us at email@example.com or by calling us on 01248 719254.